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Pearl River Union Free School District, NY -- Moody's confirms Pearl River UFSD, NY's GOs at Aa2; assigns Aa2 issuer rating

·11 min read

Rating Action: Moody's confirms Pearl River UFSD, NY's GOs at Aa2; assigns Aa2 issuer ratingGlobal Credit Research - 19 Feb 2021New York, February 19, 2021 -- Moody's Investors Service has assigned a Aa2 issuer rating to Pearl River Union Free School District, New York. The issuer rating reflects the district's standalone credit quality and ability to repay debt and debt-like obligations without consideration of any pledge, security or structural features. Concurrently, Moody's has confirmed the underlying rating on the district's general obligation unlimited tax (GOULT) bonds at Aa2. This action concludes a review for possible downgrade initiated on January 26, 2021 in conjunction with release of the US K-12 Public School Districts Methodology.RATINGS RATIONALEThe Aa2 issuer rating incorporates a sizable and mature tax base located in Rockland County. The rating is supported by a strong resident wealth and income profile. Also factored into the rating is the district's stable financial position and average long-term liabilities.The rating assigned to the district's general obligation bonds is equivalent to the Aa2 issuer rating based on the district's general obligation full faith and credit pledge as well as an unlimited property tax that is dedicated to debt service.RATINGS OUTLOOKMoody's does not usually assign outlooks to local government credits with this amount of debt outstanding.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS- Significant growth in reserves and liquidity- Material decline in long-term liabilities- Stabilization of enrollment trendsFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Declines in reserves and liquidity- Material increase in long-term liabilities- Inability to manage enrollment declinesLEGAL SECURITYThe bonds are secured by the district's faith and credit and pledge to levy ad valorem property taxes to pay debt service unlimited as to rate or amount. The bonds are further secured by the State of New York's commitment to advance available state aid to pay debt service pursuant to the state's Section 99-b intercept program.PROFILEThe district encompasses approximately 14 square miles in Rockland County and is located about 21 miles north of New York City (Aa2 negative). The district's estimated population is 16,036 and they serve 2,387 students.METHODOLOGYThe principal methodology used in these ratings was US K-12 Public School Districts Methodology published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1202421. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Robert Weber Lead Analyst Regional PFG Northeast Moody's Investors Service, Inc. 7 World Trade Center 250 Greenwich Street New York 10007 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Valentina Gomez Additional Contact Regional PFG Northeast JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. 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